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On 17 November 2021, the European Commission presented a proposal for a new EU regulation on deforestation-free products that aims to minimise the EU’s contribution to global deforestation by minimising consumption of products linked to deforestation. This proposal is an important step forward: global deforestation rates remain alarmingly high – around 10 million hectares of forest are still lost every year, almost 90% of which is caused by the expansion of agricultural production, and the EU remains one of the world’s largest importers of deforestation.
Existing international, regional and private sector initiatives to halt global deforestation have not delivered results. Greater action is needed to drive the necessary changes in global agricultural production and consumption trends.
Against this backdrop, the Commission’s proposal targets a list of forest-risk commodities (cattle, cocoa, coffee, oil palm, soy, and wood) and products derived from them to ensure they are “deforestation-free” and have been produced in compliance with local laws. EU companies must exercise due diligence to ensure their products meet these standards.
However, some industry stakeholders have made public statements resisting this change. One element in particular has received significant criticism from industry participants: the requirement to trace forest-risk supply chains back to the point of production, known as a ‘traceability’ requirement.
This briefing explains the traceability requirements in the Commission’s proposal, responds to concerns raised by industry stakeholders, and reiterates why supply chain traceability is essential to minimising the EU’s contribution to global deforestation.